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Euro US Dollar Exchange Rate Plummets on Italian Referendum Result

Euro EUR currency news

Although the Italian referendum result initially saw the Euro US Dollar exchange rate crash, EUR has since managed to recover much of its losses.

  • EUR USD rate at 1.06 – USD EUR trades at 0.94
  • Eurozone PMIs rise in November – Aftermath of Italian Referendum proves short-lived
  • US Dollar strengthens on crude oil costs – Concerns elsewhere on Trump’s China comments
  • Eurozone retail sales set to rise in near-term – Optimism in US for incoming PMI result

The US Dollar has found itself in increasingly high demand during trading so far today, despite some alarming comments emerging from the President-Elect’s social media.

Euro Exchange Rate News: EUR Bounces Back as Markets Digest Renzi’s Referendum Defeat

The Euro has found itself stabilising against most peers today, although the currency still remains in the region of 1.06 against the US Dollar (EUR USD) – up from 1.05 immediately following the Italian Referendum.

The big news of the day has been that Italy voted ‘No’ in the constitutional referendum, triggering the resignation of Prime Minister Matteo Renzi.

This outcome was largely priced in, but did not prevent the Euro from dropping sharply in the immediate aftermath. Since then, the single currency has largely recovered.

Renzi’s departure is not expected to trigger an immediate election, but has caused many economists to question whether the Eurozone itself is now under threat from isolationist political elements.

In much more positive news, the finalised Eurozone composite and services PMIs have risen in November, though not to the levels that had been forecast.

US Dollar (USD) Rises In Spite of Trump’s Concerning China Criticisms

The US Dollar has been able to advance against the Euro (USD EUR) by around 0.3% during trading today, while against most other peers USD has been in similarly high demand. During the height of the shock over the Italian Referendum result, the USD EUR pairing hit a high of 0.95.

As well as being supported by rising crude oil prices today, USD has also been boosted by last week’s surprise drop in the national unemployment rate.

Restraining US Dollar gains, however, has been President-Elect Donald Trump, who has made a pair of notable remarks on social media.

The first concerned future economic policy when it comes to US companies – Trump has outlined that companies will be able to move between all 50 states ‘with no tax or tariff being charged’. If they try to leave the US and sell their products back to the country, however, Trump has stated that ‘there will be a tax on our […] border of 35%’.

Elsewhere, Trump has also ruffled diplomatic feathers by criticising China for devaluing the Yuan and building military installations in the South China Sea. Given that last week saw Trump offend Beijing with a call to the contentious territory of Taiwan, this latest verbal attack is unlikely to sit well with the Chinese Government.

Future EUR USD Forecast: Further Euro Gains Possible on Retail Sales Optimism

The Euro may be able to climb considerably against the US Dollar (EUR USD) in the near-term, given that impending Eurozone retail sales stats are forecast to rise.

Looking to the afternoon, US Dollar shifts are possible on the ISM non-manufacturing PMI result for November, as well as the finalised services PMI for the same month.

An ISM rise from 54.8 to 55.6 is predicted, though any positivity could be tempered by the services result falling slightly in line with forecasts.

Current Interbank Exchange Rates

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.06 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.93 today.